2011 has been hailed as the “year of geolocation.” Alas, so was 2010. As was 2009 and 2008. Yet geolocation services like Foursquare and Gowalla continue to seek mainstream audiences with limited success.

Most smartphone users have never used a geolocation app. What’s holding them back? And how should marketers approach these emerging technologies?

The Value of Geolocation

It’s easy to see why marketers would be interested in geolocation: You can effectively target customers at the most important point in the consideration cycle – standing right in front of you. Digital marketing has historically been tasked with either an awareness/brand-building role, or – more frequently – a direct response role, driving customers right into the ecommerce funnel.

Geolocation is one of the hottest trends in social networking today. Users enjoy connecting with friends at nearby locations. Businesses are beginning to take note of the opportunity to tie their brick-and-mortar locations to their online marketing.

As users provide more information about their location, serious privacy implications are beginning to surface. For instance, a Webroot study released in July 2010 found that more than half of survey respondents who used geolocation services were worried their privacy was at risk.

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